Article

Uniquely identified

Several new commercial offerings take fingerprint data and use it to drive everything from personal identification to retail payment. But how much education will consumers need before they embrace it - and what are the implications for the security of personal data?

July 4, 2005 by James Bickers — Editor, Networld Alliance

Like snowflakes, no two fingerprints are alike; every schoolchild knows this, and yet this simple fact could have some enormous practical applications in the IT era.

Take the ongoing debate over national I.D. cards, for instance. If a suitable technology infrastructure were in place, it would be a moot discussion; everyone is already carrying around a unique identifier, and unlike a card, we can't leave home without it.

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Of course, personal identification comes with benefits for less weighty fields as well. A number of companies are jockeying to deliver the fingerprint killer-app for retail, a world where every second counts and a decreased transaction time usually results in an increased bottom line.

Paying with a touch

One company working to perfect the biometric payment model is Herndon, Va.-based BioPay. Founded in 1999, the company's payment system involves a one-time enrollment process for new consumers, in which both index fingers are scanned while the cashier takes information from the customer's driver's license and funding source. The enrollment time takes about a minute, which is a pretty fast transaction, but according to vice president of marketing Donita Prakash, the real speed comes when the customer goes to make a purchase.

A demonstration of the BioPay biometric payment system

"We have clocked the `tender time' at five seconds at the Lowes grocery store in Hickory, N.C.," she said. "This compares to industry averages of 30 seconds for a signature card."

The chain of 108 Lowes stores is one of BioPay's biggest successes, but not its only one. According to Prakash, 150 retail locations are either online with the system or working on installation, and she projects 400 locations installed by the end of 2005.

Speed gains are also realized by users of the Pay By Touch system, which was recently integrated with Radiant Systems' petroleum and c-store retail application, among others - notably, Pay By Touch is installed throughout the Piggly Wiggly grocery chain in South Carolina and Georgia.

More research on these key terms: Biometrics Retail POS

According to company spokesperson Shannon Riordan, a Pay By Touch enrollment takes about two minutes; once enrolled, transaction times average 15 seconds.

While the speed of the transaction is a big draw - particularly for those retail situations where long lines spell lost sales - decreased per-transaction fees are likely the bigger selling point. Since the sale is treated as an ACH debit, fees are about 75 percent lower than comparable credit or signature-debit transactions.

Will consumers be skeptical about giving their fingerprint to a commercial database? According to both Riordan and Prakash, this is not proving to be an issue since they are not actually collecting fingerprints - their software instead generates a number of data points at the moment of the enrollment scan, stores that numerical information and discards the fingerprint itself.

Prakash added that at no point in the BioPay enrollment does the customer give out his or her social security number. "Today's typical identity thief has to get your SSN in order to steal your identity," she said. "What can they do with 40 data points that equate to your fingerprint? The answer is, `nothing.'"

If you build it Â… will they come?

Also of interest ... Checks and balances Cash action settlement What price loyalty?

The technology is undeniably impressive, but what will it take for consumers to adopt it in statistically meaningful numbers?

"This suffers from the classic chicken-and-egg problem that a lot of new technologies face," said Nikki Baird, analyst with Forrester Research. "The benefit to the consumer is that you don't have to carry any method of payment with you - you could be completely cashless, cardless, checkless. Â… The problem with that is you can only be truly cashless when everyone accepts the biometric payment format - which means, until that happens, you're still going to have to carry around various forms of payment."

Baird said that biometric payment does have strong benefits for the retailer. Cashless transactions are always beneficial for loss-prevention reasons, and when you combine that with lower processing fees, the application starts to look pretty attractive. She also said that through anecdotal, "ear-to-the-ground" research, she perceives that biometric-based authentications seem more secure to consumers than magnetic-stripe transactions.

But retail has a long way to go and a lot of work to do before this killer app can begin to bare its teeth.

"The emerging biometrics industry needs to work with retailers to find a way to prime the pump," she said, "to get the level of deployment past some tipping point where there are enough of these payment devices in enough places that consumers can get away with being cashless and cardless. Then consumers will start to see the benefit, and will start pushing retailers to have it."

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